finance

Small businesses may get boost

A proposed program could help entrepreneurs gain access to institutional funding through Panama’s stock market.

In the coming weeks, the Costa Rican stock exchange will start a program that will allow small start-up companies to seek funding from institutional investors.

The program is called the Mercado Alternativo para Acciones (Mapa), and it is expected to help entrepreneurs with big ideas but little money access potential funding sources.

According to Matthew Sullivan, Mapa director, the companies involved in the program will have to meet certain requirements regarding transparency and corporate governance. It will also need a "sponsor," which will be a member of the exchange that will vouch for the company.

But beyond those requirements, there will be few restrictions on the type of businesses that can become involved in the program or the size of the investment the company hopes to acquire.

In Panama, a similar program has been proposed by officials at the Ciudad del Saber. The program, called the Mercado Alternativo para Emprendedores, is still in its earliest stages of development. The securities would be traded on the Panama Stock Exchange.

Under the program's preliminary framework, Ciudad del Saber officials would act as a "filter" to determine which entrepreneurs could participate. The Panama stock market would provide administrative support.

But the success of such a program is not without its challenges.

Those challenges, however, will be much less daunting if the program in Costa Rica turns out to be a success.